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EB-5 and the Child Status Protection Act – what you need to know

A primary motivation for many EB-5 investors is acquiring permanent residency status for their children in hopes that they can attend American universities and secure jobs in the United States upon graduating. Under current immigration law, in order for one to qualify as a derivative applicant and be eligible for immigration benefits along with the primary applicant (the primary applicant being an EB-5 investor), the individual must be either the primary applicant’s spouse or child. A “child” is defined in the Immigration Nationality Act as an individual who is unmarried and under the age of 21. Once a child reaches the age of 21, he or she is no longer eligible for immigration benefits based on the relationship to the parent, which is known as “aging out.” Prior to the enactment of the Child Status Protection Act (CSPA) in August of 2002, a derivative child applicant who turned 21 at any time prior to receiving permanent residence was no longer considered a child for immigration purposes. This means that even if the child’s parents filed an application prior to the child’s 21st birthday and the application is currently pending, the child would no longer be deemed eligible for immigration benefits under his or her parent’s EB-5 investment.

Congress recognized that many children were aging out because of adjudication delays and created the Child Status Protection Act (CSPA) to remedy this situation. According to USCIS, the CSPA is designed to protect a beneficiary’s immigration classification as a child when he or she ages out because of adjudication delays at immigration. The beneficiary’s age essentially freezes on the date the petition is filed until the date the petition is approved, which helps protect a child from aging out as long as the petition was filed prior to his or her 21st birthday. Once the petition is approved, the child’s age unfreezes and he or she must seek to acquire permanent residence within one year of a visa becoming available.

It is possible that a visa may not be immediately available and CPSA does not protect against visa backlogs. There are 10,000 EB-5 visas available for all primary and derivative applicants annually. Visa retrogression can occur if the State Department believes there will be more people applying for a visa than the amount of visas available in the fiscal year, or if one country is applying for a significant share of a visa category. For example, Chinese nationals apply for a significant share of the EB-5 visas available each year which causes the State Department to issue a warning that the EB-5 visa may retrogress for Chinese nationals. CSPA only allows the time a petition (e.g. an I-526 Petition) was pending to be subtracted from the beneficiary’s biological age at the time a visa becomes available so the applicant is not penalized for the time the petition was pending with USCIS. Even with the allowed subtraction of time, this could result in some children of EB-5 investors “aging out” if an I-526 Petition is approved but there are no EB-5 visas available, depending on how long it takes for an EB-5 visa to become available. While the CPSA has essentially removed accountability from applicants once the application is filed, it is extremely important that EB-5 investors still file their petitions as long as possible before any of their children’s 21st birthdays in order to mitigate the risk of that child “aging out” during the EB-5 visa process.

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